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Chad 'screws up' Africa's loans
04/01/2006 11:04 - (SA)
Happy New Year, compliments of the season, whatever. That's over now, and the flush of optimism has worn off. Let's get right into the meaty and messy business of the year. And the topic of discussion for today, for those few of you who have bothered going back to work already, is Chad.
Chad? What's a chad?, I can hear many of you exclaiming. Being South Africans, you're probably capable of naming every single English Premier League football club, with their managers, but not the countries bordering South Africa, and who the presidents of those countries are. Except for that Mugabe chappie, obviously.
So here's a quick snap quiz. Is chad:
1) a fish.
2) a small, landlocked, central African country, sometimes known (according to Wikipedia) as "the dead heart of Africa".
3) the perforated edge strips on printer paper, after they have been separated from the printed portion. Also called selvage, perf, and ripoff.
No, a chad is NOT a fish. If you answered either of 2 or 3, you'd be right. Why name a country after scrap paper, you're asking yourself. Well, it's an entirely appropriate name, given the way the Chadamites have just treated an agreement they had with the World Bank.
This is the basic story, which I was alerted to by Jean-Jacques Cornish's excellent Africa Report on Cape Talk/702 radio: The World Bank gave Chad some $4bn to build a oil pipeline between Chad and Cameroon. According to allafrica.com (from which much of the info in this column is drawn), this pipeline will fatten state coffers by at least $2bn over the next 25 years, or $80m per year.
The exchange
In exchange, the Chad government signed a legal agreement designed to make sure that oil revenues benefited the poor of Chad (which appears to be the entire population, give or take a bunch of politicians). The law also required that 10% of the proceeds be put into a future generation fund, to benefit those poor sods who'd be left with nothing but World Bank bills when the oil runs out.
Ha ha! Poor World Bank. Don't they know that a legal agreement is only as valuable as the chad on printer paper? You just throw it away, it's full of holes anyway. The Chadian National Assembly, the country's legislature, last week passed amendments to the unctuously named Petroleum Revenue Management Law.
These changes cancel the future generation fund (tough luck to the kids who are going to inherit the debt). They also double the amount of revenue that will now be available for general government spending, for Important Government Stuff like arms, Mercs and trips overseas.
Why should we care about this? Well, this agreement was intended to serve as a blueprint for future lending to African countries, so basically, the Chadamites have screwed it up for the rest of Africa.
When the World Bank complained, Chad accused it of "acting like a coloniser." Hmm. Now where have I heard that one before? You'd think they'd realise that before they took the money. And take it they did - in a country which is one of the poorest in the world, the government used the first $4.5m of the signing bonus from the oil companies to buy arms to fight its northern rebels.
On the other hand (or other underhand, I suppose I should say), the oil companies are the usual band of rapacious suspects, like the US giant ExxonMobil, and Chevron. Still, this is not looking good for the future of World Bank loans to African countries. Ah well, what do you expect if you lend money to a country with a name that's synonymous with ripoff?
Chris Roper was determined to start the New Year off on a high. Alas, it's the high stink of corruption.
Send your comments to Chris or discuss this column now in our debating forum.
See Chris's previous columns in his blog The World
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